The Trump Vietnam Rate Agreement causes new commercial war tensions, increasing bets ahead of Japan’s deadline
President Donald Trump has announced a new commercial agreement with Vietnam that imposes a 20% rate on all Vietnamese goods entering the United States and a 40% rate in the articles encreated through third countries before reaching American Shores. The announcement, made on the president’s social networks, marks a strong escalation in commercial tensions in the Asia-Pacific region just when the current rate is close to its expiration on July 9.
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In a series of positions, Trump described the agreement as a “great cooperation” between Washington and Hanoi, emphasizing that the agreement would transform bilateral trade while protecting US manufacturers. “This is a great advance,” Trump said, adding that the pact is designed to level the playing field for US workers while guaranteeing that foreign goods do not undergo US industries.
What includes treatment
According to the proposed terms, Vietnam has agreed:
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Pay a 20% of tariffs to all goods exported directly to the United States.
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Pay a 40% of tariffs on goods that travel through third countries before reaching US portsA measure intended to stop transphord practices often used to avoid existing tariffs.
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Allow 0% tariffs on US exports to Vietnameffectively granting free American products access to the Vietnamese market.
Trump said he spoke personally with Nguyen Phu Trong, general secretary of the Vietnam Communist Party, to end the agreement, stating that the agreement represents a “total opening” of Vietnam markets to US products in exchange for continuous commercial participation.
“This is something that Vietnam has never done before,” Trump said, qualifying the agreement as a “great victory for US manufacturers” that will support the sale of US manufacturing SUV, agricultural products and technology in a quick Asian Southeast market in rapid growth.
Not confirmed by official channels
Despite the president’s announcement, Neither the United States Commercial Representative’s office nor the Vietnamese government have published a formal statement confirming the agreement. Commercial analysts warn that the agreements of this magnitude generally require months of structured negotiations and legal documentation before the implementation.
“There is a good dose of skepticism about whether Hanoi would agree with high tariffs on their own exports while eliminating all barriers to US assets,” said Daniel Liu, a senior analyst at the Peterson Institute of International Economics. “It is possible that the conversations are ongoing, but an agreement ended at this scale would be unusual without prior notice.”
Why is the treatment important
If implemented, the proposed commercial pact could have significant domain effects throughout the global supply chain and the economy of the United States:
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Opening of Vietnamese markets to American goods:
The elimination of US export tariffs would provide US companies with a competitive advantage in the Vietnamese market, which potentially increases sales for agricultural producers, automobile manufacturers and technology exporters.
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Increase in prices for Vietnamese exports in the United States:
A 20% tariff on Vietnamese goods would increase costs for American importers and consumers. While this could protect national producers from lower cost imports, it could lead to higher prices in the US for clothing, electronics and other goods commonly coming from Vietnam.
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Addressed to Chinese transbios:
The 40% tariff on the assets routed through third countries aims to take energetic measures against transhipment practices that some Chinese companies have supposedly used to avoid existing tariffs in the United States. By imposing pronounced tariffs on redirected goods, the administration expects to close gaps and enforce more strict commercial compliance.
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Pressures of the Commercial War before Japan’s deadline:
The time of the announcement is significant, arriving days before the pause of the rate expires on July 9. Trump has publicly criticized Japan, qualifying its “Malcriated” leaders and accusing the country of refusing to open their markets to American rice and cars.
Commercial observers believe that the Vietnam Pact could increase the pressure on Japan to make concessions during the next negotiations, since Japanese officials fear a return of the pronounced tariffs in their exports to the United States.
“This announcement can be a strategy to indicate to Japan that administration is willing to intensify tariffs in other places while rewarding countries that cooperate,” Liu said.
Uncertainty for companies and consumers
For US companies, the proposed agreement offers opportunities and risks. American manufacturers could benefit from reduced competition of low -cost Vietnamese imports and get access to the market in Vietnam. However, retailers and consumers can face higher prices in a variety of goods, from clothing to electronics, at a time when inflation remains a concern for many homes.
Meanwhile, companies that operate in Vietnam may need to reassess their supply chains if the proposed tariffs materialize. Companies that use Vietnam as a manufacturing center to supply the US market could face a significant increase in costs, which potentially forces them to relocate production or absorb the highest expenses.
Geopolitical implications
The proposed agreement also has geopolitical importance in the context of the Indo-Pacific strategy of the Biden Administration. Vietnam has become a key partner for the United States to counteract China’s influence on the region. By strengthening economic ties with Hanoi, Washington aims to deepen its associations in Southeast Asia, while reducing the dependence on Chinese manufacturing.
However, imposing tariffs pronounced on Vietnamese exports could tighten relationships if they are not careful, which can potentially complicate broader strategic objectives.
What comes next?
As the July 9 deadline is approaching for the rate of the rate, all eyes are in itself the administration will formalize the proposed agreement with Vietnam and how it will affect the next negotiations with Japan.
Trump has suggested that he can allow tariffs on Japanese exports to resume if Tokyo does not accept to expand access to the American goods market, particularly agricultural products and cars.
Japanese negotiators, already taken by surprise by the announcement of Vietnam, now face a compressed timeline to reach an agreement before the pause of the rate expires. Otherwise, it could trigger a new wave of rates, raising tensions with one of the closest allies in the United States in the region.
Final thought
President Trump is framing the Vietnam Agreement proposed as part of a broader effort to protect US industries, narrow commercial lagoons and expand export opportunities in Southeast Asia. As administration’s tariff policies near a critical situation, the pact proposed with Vietnam could redefine commercial dynamics in the region, intensify commercial war tensions and influence negotiations with other key partners.
However, the lack of official confirmation underlines the uncertainty surrounding the implementation of the agreement and the challenges that may be ahead. Companies, those in charge of formulating policies and consumers will closely monitor developments in the next few days, since bets continue to increase in the complex commercial panorama of the United States.
Writer
@Ellena
Ellena is an experienced cryptographic writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides information about the latest trends and innovations in the currency space.
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